What's in this?
It is a question a child would ask, but as the old TV ad tagline put it, it is not a childish question. As the world moves toward the electrification of transportation, it is a question that should be asked to all producers of electrified mobility products, from Teslas (TSLA) to e-scooters. So, are electric vehicles (EVs) really that much greener than vehicles with internal combustion engine (ICE) architecture?
Once they are on the road, yes, of course. Electric vehicles emit zero carbon throughout the driving process. But what about their manufacture? What about the ingredients that form the supply chain of the finished vehicle? And what about the electricity that powers that manufacturing process?
Unless you have a lightning rod affixed to your Model 3, that electricity must be produced somehow, and hydrocarbons are an important feature in the world's energy infrastructure, and will be for at least the next 30 years, by my reckoning.
I will cover liquefied natural gas (LNG) in my next column, but here I will talk about greening the process of producing an EV battery.
The anode is composed mainly of graphite. I have mentioned Westwater Resources (WWR) in my Real Money column before. Westwater's CEO, Chris Jones, uses a rule of thumb that there is 10x as much graphite as lithium in a lithium-ion EV battery. Much like the electricity used to power that Model 3, that graphite, a form of the carbon element, fortunately just sits in piles at the sides of major highways and doesn't require any energy resources to dig it up. Ha! Nothing could be further from the truth.
Chris and Westwater are going full steam to develop a mine in Coosa, Alabama, near the Mercedes plant in Vance, Alabama, and deep within the southern U.S. "EV belt," but that plant is not expected to come online fully until 2028.
And what about the cathode side of the EV battery? That's where things get really nasty, from an environmental point of view, anyway. The problem is that, unlike gold, most metals are not available for exploitation from Mother Earth in pure form. They are alloyed and must be de-alloyed and often combined with other elements, such as sulfur in the form of sulfuric acid.
High school chemistry taught me that H2SO4 is pretty nasty stuff, and in the large-scale process of battery manufacturing it is especially so. Plus, the cathode powder needs to be baked and re-baked several times -- and those ovens need to be powered by something... again, with hydrocarbons. Then, as is so often the case in modern manufacturing, those sulfates are usually shipped from where the metals are found to where the batteries are produced.
There are a lot of slow boats to China in the battery materials game, and, at the current time, every single one of them is powered by hydrocarbons.
Making EV batteries is just not a green process. But every great tech company is based on the notion of providing a solution to an existing problem, and that is where Nano One Materials (NNOMF) enters the picture.
I have written often about Nano One, and this week Nano One management posted a video to YouTube that is a much better process-explainer than my thousands of words. You can watch it here.
The release of this video on Monday catalyzed a nice bounce in Nano One shares on the Toronto Stock Exchange, and for many investors, I believe it was an a-ha moment.
Nano One will never make an EV battery and doesn't produce a complete cathode. Nano One is a process company. With boldface names in Nano One's partnership list, such as Volkswagen (VLKAF) (and another global auto original equipment manufacturer that cannot be identified for competitive reasons), Johnson Matthey (JMPLF) , China's Pulead and Brazil's CBMM, the corporate company Nano One keeps should have flagged to investors that this company's process technology -- usually referred to as M2CAM, or Metal-to-Cathode-Active-Material -- is very real and very much in demand.
But YouTube videos are useful as well, and it is great to see Nano One benefitting from this exposure. Another spot of exposure was at the Management Access Conference hosted by my firm, Excelsior Capital Partners, a few months ago. You can watch that video here.
Nano One's CEO, Dan Blondal, was incredibly gracious with his time that Friday and even took the time to reach out to me to answer audience questions that hit the Vimeo feed after Dan's time slot had expired. I love it when the good guys win.
So, do your homework and watch the two videos to which I have linked in this column. There is a huge opportunity to green the process of making batteries for EVs, the green standard-bearer themselves, and Nano One's M2CAM technology will enable that greening.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider some of the names mentioned to be micro-cap or small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.